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Gold/Mining/Energy : Gold Price Monitor

GDXJ 142.13

+5.5%

Jan 22 4:00 PM EST

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To: Zeev Hed who wrote (70664)	5/29/2001 8:53:23 PM
From: yard_man	Read Replies (2) of 116900

OK -- here's your silly argument again -- maybe you'll get it this time. Here's your premise: >>>Gold can only be mined at a given rate ... Rate of increase in the worlds production of goods exceeeds this rate of new gold production by some amount.<< You said this implies runaway inflation. Nonsense!! If we are on a gold standard the same amount of gold buys more goods as the world's growth in the production of goods outstrips the production of gold. You mistakenly called that inflation because you resort to a paper currency as the ultimate value -- that's not a gold standard -- with a gold standard -- an amount of gold serves as the currency. If the amount of gold in circulation grows more slowly than the amount of goods. Gold can buy more goods as time wears on. That's not inflation -- inflation is when is takes more and more of the same currency to buy the same amount of goods. Your simple example results in a currency that appreciates in value against the worlds goods. Of course, I realize that is d&mn near a foreign concept to most A few more things which many espousing such great economic knowledge don't understand. A currency buying more goods as time wears on can be healthy and in no way implies a contraction is taking place.

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